Itau has about 5 billion reais ($2.23 billion) in
provisions beyond the minimum required by regulators, while the
Sao Paulo-based bank’s loans to companies controlled by the
former billionaire totaled 802 million reais as of the second
quarter, UBS analysts including Philip Finch wrote in a note to
clients. Bradesco has excess provision of about 4 billion reais
and an exposure of 868 million reais, the analysts wrote.

Banks’ risks linked to Batista companies are receding after
some were restructured and recapitalized, the analysts wrote,
adding that mining companies MMX Mineracao & Metalicos SA and
CCX Carvao da Colombia SA sold part of their assets to foreign
investors.

Part of Itau’s and Bradesco’s exposure is to Eneva SA,
formerly Batista’s MPX Energia SA. EON SE is the largest
shareholder in the firm after participating in an 800 million-real capital increase by Eneva in July. Itau loaned 285 million
reais to the utility, while Bradesco has 60 million reais in
loans, UBS said.

Itau didn’t immediately respond to a request for comment,
and officials at Bradesco declined to comment. EBX Group Co.,
the holding company for Batista’s firms, didn’t immediately
reply an e-mail seeking comments about its outstanding loans
from Brazilian banks.

Batista companies’ total debt isn’t clear because Brazilian
regulations prohibit banks from disclosing their exposure to
specific clients, according to UBS.